There have been several major accomplishments within the past fiscal year. The first relates to our long-running project to study the possible involvement of nAChRs relating to Alzheimers disease (AD) since dysfunctions in these receptors have been linked to AD, a human neurological disorder that is the leading cause of dementia. The most significant genetic risk factor for the development of Alzheimers disease is inheritance of the E4 allele of apolipoprotein E (apoE). Recent data has demonstrated the ability of apoE-derived peptides to inhibit nAChRs in rat hippocampus. We investigated the functional interaction between nAChRs and apoE-derived peptides in Xenopus oocytes expressing selected nAChRs. Both a 17 amino acid peptide fragment, apoE133-149, and an 8 amino acid peptide, apoE141-148, were able to maximally block ACh-mediated peak current responses for homomeric alpha7 nAChRs. ApoE peptide inhibition was dose-dependent, and voltage- and activity-independent. The current findings suggest that apoE peptides are non-competitive for acetylcholine and do not block functional alpha-bungarotoxin binding. Amino acid substitutions in the apoE peptide sequence suggest that the arginines are critical for peptide blockade of the alpha7 nAChR. Furthermore, mutation of tryptophan (W) 55 to alanine on the alpha7 nAChR blocked apoE peptide-induced inhibition of ACh-mediated alpha7 nAChR responses. Additional mutations at W55 suggest that hydrophobic interactions between the receptor and apoE141-148 are key for inhibition of alpha7 nAChR function. A mutated apoE peptide also demonstrated decreased inhibition at alpha7-W55A nAChRs as well as activity-dependent inhibition of both wildtype alpha7 nAChRs and alpha7-W55A receptors. Finally, a three-dimensional model of the alpha7 nAChR was developed based on the recently refined Torpedo nAChR. A structural model was proposed for the binding of apoE141-148 to the alpha7 nAChR where the peptide binds at the interface between two subunits, near the ACh binding site. Similar to the functional data, the computational docking suggests the importance of hydrophobic interactions between the alpha7 nAChR and the apoE peptide for inhibition of receptor function. The current data suggest a mode for apoE peptide binding that directly blocks alpha7 nAChR activity, and consequently may disrupt nAChR signaling.[unreadable] [unreadable] Second, the alpha7-W55A nAChR desensitized more slowly, and recovered from desensitization more rapidly, than wildtype alpha7 nAChRs. This interpretation was validated by kinetic modeling of receptor function. Mutating W55 to other aromatic residues (phenylalanine or tyrosine) had no significant effect on the kinetics of desensitization, whereas mutation to various hydrophobic residues (alanine, cysteine, or valine) significantly decreased the rate of onset and increased the rate of recovery from desensitization. To gain insight into possible structural rearrangements during desensitization, we probed the accessibility of W55 by mutating W55 to cysteine (alpha7-W55C) and testing the ability of various sulfhydryl reagents to react with this cysteine. Several charged (both positively and negatively) sulfhydryl reagents blocked ACh-induced responses for alpha7-W55C nAChRs, whereas a neutral sulfhydryl reagent potentiated responses. These data suggest that W55 plays an important role in both the onset and recovery from desensitization in the rat alpha7 nAChR, and that aromatic residues at position 55 are critical for maintaining rapid desensitization. Furthermore, these data suggest that W55 may be a potential target for modulatory agents operating via hydrophobic interactions.[unreadable] [unreadable] Third, we examined the effects of nAChR activation in the GABAergic neurons in slices through the rat substantia nigra pars reticulata (SNr), which is the primary output nucleus for the basal ganglia (BG) in the rat. The SNr is reciprocally connected with the pedunculopontine tegmental nucleus (PPN) in the brainstem, which provides cholinergic innervation to most BG nuclei. The cholinergic input into the BG is considered to be important because PPN activity is altered in Parkinsons disease (PD), a neurological disorder involving the BG, and cholinergic pharmacotherapy is beneficial in alleviating some of its symptoms. We found that SNr neurons express the alpha7 subtype of nAChRs, the function of which we assessed using patch-clamp techniques (Poisik et al., 2008). Besides alpha7 nAChRs, GABAergic SNr neurons also contained functional non-nalpha7 nAChRs. Using local photolysis of caged carbachol, we mapped alpha7 nAChR-mediated currents along the visible extent of filled SNr neurons and found that alpha7 nAChRs can be functionally detected as far as 60 microns away from the soma. Our data are paving the way to a better understanding of the physiological roles of nAChRs in the BG.